According to their latest financial report, the Chinese search engine giant Baidu is quickly overtaking Twitter in the US stock market. Since its 2013 IPO price of $26 per share, Twitter is at a point where it is trading for less than a third of their original price. In 2005, Baidu had their IPO with a split-adjusted price of $2.70 per share.
Both companies are experiencing less than profitable times, yet Baidu remains the better choice for investment. While Twitter is experiencing single-digit growth percentages, Baidu is rolling back on its revenue stream due to a controversial search result related to heath ads, one of their high-earning advertisers.
A cancer patient who used a questionable Baidu ad prompted internet regulators in China to tamp down on Baidu and their competitors in terms of advertising health-related services. Because of this, Baidu’s financial performance seems to be worsening. The company is struggling to keep marketers in their roster, but the incident with the health listing is making it harder for them to consistently increase their revenue although they made a loss of 8% only.
Twitter, on the other hand, reported that their revenue growth has dropped below analyst expectations in the last quarter of 2016. The upside is that they reported an increase in monthly average users. Even with the positive output of both companies, they are still experiencing a downward curve. All in all Baidu is looking to be the better long-term investment.
At present, reports on Twitter’s future are flip-flopping in terms of revenue growth, product development, and positive sentiment which investors consider to be a volatile investment.